FlexxPay, a Dubai-based startup that enables employers to offer salary advances to their employees, has raised investment from a group of individual and corporate investors, the startup announced earlier this week. FlexxPay did not disclose the financial details of investment but has confirmed to MENAbytes that it’s a seven-figure (USD) deal.
Founded last year by Michael Truschler and Charbel Nasr, FlexxPay is a financial wellness platform that partners with employers to offer their employees salary advances for their already earned income. The startup that claims to be first of its kind in the region, acts as an agent between the employers and their employees, allowing employees to access a portion of their already earned but unpaid salary at any time. The payments are made through Abu Dhabi Commercial Bank.
FlexxPay doesn’t charge any interest but has a small transaction fee. Michael Truschler, the co-founder and CEO of FlexxPay said that the fee is 10 percent of what the banks normally charge. “We are a pure B2B business, i.e. we are signing with corporate clients. Once signed, their employee can use the platform. Through ADCB, the salary advances get processed on behalf of the employer. For the employer, he will see a rise in productivity and retention rates while saving time and money (from HR). We don’t charge the employer for the platform and don’t need to integrate with any of his systems.”
Advances and fees are then paid by the employer to FlexxPay during the salary cycle at the end of the month, while the employees receive their salaries less the advances and fees already paid out to them earlier in the month.
So, if the employee who let’s say has a salary of 6,000 dirhams and is requesting a salary advance of 2,000 on tenth day of the ongoing month, he will receive that amount from FlexxPay immediately and the rest of 4,000 dirhams FlexxPay’s transaction fee at the end of month as regular salary payment from the employer.
“In a traditional pay cycle, an employee receives a salary at the end of each month. This traditional method of payment fails many paid workers, with more than 50% of the workforce across the region living from payday to payday, unable to cover unexpected expenses that may arise during a month. For many, that means skipping meals, selling possessions, taking on extra work or contemplating other extreme measures,” said FlexxPay in a statement.
Michael Truschler, co-Founder and CEO of FlexxPay, commented, “The problem of salaries being paid only monthly while expenses occur every day, deserves a solution. It’s the reason we do what we do. Our mission is to fix the pay frequency problem at its root by providing businesses and their employees with an instant pay platform. We empower those who need it the most to access a portion of their already earned salaries whenever they need to. Working together with ADCB as one of the most reputable banks in the region has enabled us to offer the services in a fully automated way.”
“FlexxPay offers its platform at no cost and no risk to companies. Businesses that onboard to the FlexxPay platform will benefit substantially from increased productivity, engagement and retention, as employees are motivated and are better able to focus on their jobs. Employees will warmly welcome the solution because it provides instant access to funds, removing costly personal loans or stressful levels of indebtedness,” he added.
The startup that’s already working with different employers in UAE has over 5,000 employees using its platform. FlexxPay plans to use a part of newly raised funds to expand to Saudi by the end of this year.
- NEOM Launches ‘Seven Senses’ Accelerator to Support Entrepreneurs in Saudi Arabia - March 26, 2023
- UNWTO Launches Startup Competition Supporting Female Tourism Tech Entrepreneurs in MENA - March 26, 2023
- Exits MENA Partners With Brainy Squad to Develop Creative Investment and Entrepreneurship Content - March 26, 2023